Compliance August 21, 2015

School District Suffers Data Breach During Audit

A flash drive containing information about 403(b) or 457(b) plan participants that was given to an IRS agent was lost.
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The Katy, Texas, Independent School District (ISD) has reported a data breach affecting more than 11,000 employees.

According to news reports, during an audit of the district by the Internal Revenue Service (IRS), a flash drive containing names, birth dates, mailing addresses and Social Security numbers for 11,658 current and former ISD employees was misplaced by an IRS agent. The news reports did not say what type of audit was being conducted, but did say the potential breach includes employees who received a paycheck or made a contribution to a voluntary 457(b) or 403(b) retirement plan during the 2013 calendar year.

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In a letter to affected employees, Katy ISD said it does not believe the flash drive was deliberately stolen or misplaced or that any third party was involved in the incident. It also said it is seeking to recover costs from the IRS for enrolling employees in a credit monitoring service.
Participants August 20, 2015

More Participants Find Retirement Plan Provider Resources Helpful

A survey shows a significant jump in retirement plan participants’ perception of the helpfulness of provider resources for retirement planning, investing and saving.
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Quarterly statements from retirement plan providers continue to be seen as the most helpful resource to assist participants with planning, saving and investing for retirement, according to Transamerica Center for Retirement Studies’ 16th Annual Retirement Survey. Eighty-five percent of survey respondents in 2015 said quarterly statements are “somewhat” or “very” helpful. This is up from 71% in 2014.

The perceived helpfulness of online tools and calculators to project retirement savings and income needs on the retirement plan provider’s website climbed to 83% in 2015 from 65% in 2014, while mobile applications that provide the same tools were somewhat or very helpful to 59% of participants in 2015, compared to 32% in 2014.

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Other resources saw similar increases in their perceived helpfulness by plan participants:

  • Professional advice on how to invest my retirement savings from the retirement plan provider – 81% in 2015% vs. 59% in 2014;
  • Educational articles and videos from the retirement plan provider that share ideas and insights on how to save and plan for a financially secure retirement – 76% vs. 52%;
  • Informational seminars, meetings, webinars, and/or workshops by the retirement plan provider – 75% vs. 51%;
  • Informative emails sent to my work and/or my personal address from the retirement plan provider – 71% vs. 49%;
  • Mobile apps from the retirement plan provider to manage my account – 56% vs. 31%; and
  • Information on social media (e.g., Twitter, Facebook) from the retirement plan provider – 44% vs. 26%.

“It’s encouraging to see such a strong increase in the percentage of plan participants who find the information, education, and advice offered by their employer’s plan provider to be helpful,” says Catherine Collinson, president of Transamerica Institute and Transamerica Center for Retirement Studies. “This is no doubt a result of the industry-wide focus on improving retirement outcomes for participants by innovating, enhancing, and promoting a broad range of tools and educational resources.”

When asked what would motivate them to learn more about saving and investing for retirement, respondents in 2015 cited larger tax breaks or saving incentives (37%), educational materials that are easier to understand (34%), a good starting point that is easy to understand (34%), a financial adviser (29%), and a greater sense of urgency (or fear) that they need to save (22%). Twenty-two percent said “nothing” would motivate them to learn more, either because they are already educated enough or are just not interested in the topic.

Transamerica Center for Retirement Studies’ report, “A Compendium of Findings About American Workers from its 16th Annual Retirement Survey,” which provides a five-year trend analysis of findings, is available here.

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